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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Gary Korn who wrote (13739)	12/4/1999 9:26:00 PM
From: Gary Korn	Read Replies (1) \| Respond to of 14631

An old but interesting article on the IFMX/Cloudscape deal. Note the headline about new markets that are about to "soar": infoseek.go.com "Purchase occurs just when embedded database markets are poised to soar" By Clare Haney, IDG News Service September 16, 1999 -- Informix is finally to move into the remote and embedded database market with the planned purchase of Cloudscape, the database and tools company announced late Wednesday. Informix's main database rivals, including IBM, Microsoft, Oracle and Sybase already have product offerings in the low-end database market. Informix and Cloudscape have reached a definitive agreement for Informix to acquire privately-held Cloudscape through an exchange of 10 million Informix common stock shares for all of Cloudscape's outstanding stock and options, Informix said in a statement. The purchase is currently valued at $86.9 million based on Informix's closing share price Wednesday on the Nasdaq stock exchange of $8.69. To be accounted for as a pooling of interests, the acquisition, provided it gains the customary shareholder and regulatory approvals, is set to close in the fourth quarter of this year. Should the purchase of Cloudscape go ahead, it would give Informix a much-needed foothold in the remote and embedded database market where the company previously had no product offering. Rival Sybase currently dominates the low-end database market with its Adaptive Server Anywhere (ASA) offering and also offers a deployment technology called UltraLite to enable handheld devices to run the ASA database. Oracle offers a cut-down version of its high-end relational database known as Oracle8i Lite. IBM aims to have two offerings in the market -- DB/2 Universal Database Satellite Edition for large-scale laptop rollouts and DB/2 Everywhere to run on Microsoft's Windows CE operating system and 3Com's PalmOS. Market research company Dataquest predicted earlier this year that the mobile and embedded database markets are set to rocket after experiencing solid growth in 1998 when they were valued at $52 million and $400 million respectively. While Progress Software with a 19 percent market share headed up the embedded database market where the applications are primarily marketed through VARs (value-added resellers) and OEMs (original equipment manufacturers), Sybase led the mobile database market, with a 55 percent market share. However, analysts have speculated that Sybase's mobile market dominance could ultimately be eroded by Microsoft's low-end Access database given that product's ubiquity. Microsoft's attempts to develop a Windows CE version of its SQL Server database have yet to fully gel, with the product not likely to appear in beta form until the first quarter of next year, according to the software giant. A key aspect of remote and embedded databases is their ability to be in sync with server-level databases, meaning, for example, that a sales representative can enter data remotely into a database on his or her notebook computer or handheld device and then replicate that information to the company's main sales database. Cloudscape's eponymous SQL (structured query language) database is written in the Java programming language and has full object/relational capabilities, according to the Informix statement. Founded three years ago by ex-employees from Informix, Oracle, and Sybase as well as executives from object/relational database company Illustra, which was acquired by Informix, Cloudscape has more than 50 staff. Informix is slowly turning its financial fortunes around. In the company's most recent financial quarter, it beat analyst expectations with earnings of $17.5 million on revenues of $206.8 million. However, once charges related to a settlement of private securities litigation were factored in, Informix effectively posted a loss of $79.5 million for the second quarter of this year. The settlement relates to the resolution of lawsuits filed against the U.S. database company once it restated financial results in 1997. As of July, Informix also gained a new company head, when Jean-Yves Dexmier replaced Bob Finocchio as company president and chief executive officer. Dexmier had previously served as the vendor's chief financial officer and executive vice president of field operations.